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Is Invesco Russell 1000 Equal Weight ETF (EQAL) a Strong ETF Right Now?
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Launched on 12/23/2014, the Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Invesco. EQAL has been able to amass assets over $623.71 million, making it one of the larger ETFs in the Style Box - Large Cap Blend. EQAL seeks to match the performance of the Russell 1000 Equal Weight Index before fees and expenses.
The Russell 1000 Equal Weight Index is composed of securities in the Russell 1000 Index and is equally weighted across nine sector groups with each security within the sector receiving equal weight.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.20% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.94%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 12.20% of the portfolio. Financials and Industrials round out the top three.
When you look at individual holdings, Charter Communications Inc (CHTR - Free Report) accounts for about 0.60% of the fund's total assets, followed by Liberty Broadband Corp (LBRDK - Free Report) and Comcast Corp (CMCSA - Free Report) .
The top 10 holdings account for about 5.14% of total assets under management.
Performance and Risk
The ETF has added about 1.36% so far this year and was up about 5.65% in the last one year (as of 09/25/2023). In the past 52-week period, it has traded between $36.94 and $44.80.
EQAL has a beta of 1.12 and standard deviation of 18.76% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 996 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 1000 Equal Weight ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $343.14 billion in assets, SPDR S&P 500 ETF has $399.05 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Invesco Russell 1000 Equal Weight ETF (EQAL) a Strong ETF Right Now?
Launched on 12/23/2014, the Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Invesco. EQAL has been able to amass assets over $623.71 million, making it one of the larger ETFs in the Style Box - Large Cap Blend. EQAL seeks to match the performance of the Russell 1000 Equal Weight Index before fees and expenses.
The Russell 1000 Equal Weight Index is composed of securities in the Russell 1000 Index and is equally weighted across nine sector groups with each security within the sector receiving equal weight.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.20% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.94%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 12.20% of the portfolio. Financials and Industrials round out the top three.
When you look at individual holdings, Charter Communications Inc (CHTR - Free Report) accounts for about 0.60% of the fund's total assets, followed by Liberty Broadband Corp (LBRDK - Free Report) and Comcast Corp (CMCSA - Free Report) .
The top 10 holdings account for about 5.14% of total assets under management.
Performance and Risk
The ETF has added about 1.36% so far this year and was up about 5.65% in the last one year (as of 09/25/2023). In the past 52-week period, it has traded between $36.94 and $44.80.
EQAL has a beta of 1.12 and standard deviation of 18.76% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 996 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 1000 Equal Weight ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $343.14 billion in assets, SPDR S&P 500 ETF has $399.05 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.